QUESTION ONE MCK Ltd has two production departments, X and Y, and two service departments Stores...
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QUESTION ONE MCK Ltd has two production departments, X and Y, and two service departments Stores and General Services. The company has budgeted the following costs for the forthcoming period. Maintenance. Depreciation of equipment Plant insurance Heat and light Canteen costs Rent Supervision The following information is also available: X 10,000 40 Y 10,000 20 K100,000 K'000 100 58 K100,000 15% 60,000. 40,000 K200,000 K300,000 58 75 24 -50- 120 Floor Area m² Employees Plant book value Depreciation per annum 25% Machine Hours Direct Material usage Overheads are absorbed in both production departments on a Machine Hour basis. Stores 2,500 10 General 2,500 10 K40,000 20% K50,000 20% Required: (a) Prepare an overhead analysis sheet for the period, using suitable bases of apportionment. (10 marks). (b) Calculate the absorption rates for each department. (4 marks) At the end of the period the actual results were as follows: X Y K267,100 K220,100 58,800 40,500 (c) State the factors that cause an under or over absorption of overheads. (2 marks) (d) For each of departments X and Y, calculate the under or over absorbed overhead analysed under the headings given in (b) above. (6 marks) Actual Overheads Actual Machine Hours 2 23.3 QUESTION ONE MCK Ltd has two production departments, X and Y, and two service departments Stores and General Services. The company has budgeted the following costs for the forthcoming period. Maintenance. Depreciation of equipment Plant insurance Heat and light Canteen costs Rent Supervision The following information is also available: X 10,000 40 Y 10,000 20 K100,000 K'000 100 58 K100,000 15% 60,000. 40,000 K200,000 K300,000 58 75 24 -50- 120 Floor Area m² Employees Plant book value Depreciation per annum 25% Machine Hours Direct Material usage Overheads are absorbed in both production departments on a Machine Hour basis. Stores 2,500 10 General 2,500 10 K40,000 20% K50,000 20% Required: (a) Prepare an overhead analysis sheet for the period, using suitable bases of apportionment. (10 marks). (b) Calculate the absorption rates for each department. (4 marks) At the end of the period the actual results were as follows: X Y K267,100 K220,100 58,800 40,500 (c) State the factors that cause an under or over absorption of overheads. (2 marks) (d) For each of departments X and Y, calculate the under or over absorbed overhead analysed under the headings given in (b) above. (6 marks) Actual Overheads Actual Machine Hours 2 23.3
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Related Book For
Management And Cost Accounting
ISBN: 9781292232669
7th Edition
Authors: Alnoor Bhimani, Srikant M. Datar, Charles T. Horngren, Madhav V. Rajan
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